FinLit Unit 3 Study Guide

Low income is the most common symptom of financial ​irresponsibility.

• True
• False

Interest is charged on the unused portion of a line of credit.

• True
• False

A rental agreement is also called a month-to-month agreement.

• True
• False

Garnishments are the legal process that allows part of an employee's paycheck to be withheld for payment of debt.

• True
• False

Bankruptcy is the legal procedure to relief a person of excess debt.

• True
• False

With installment credit, a consumer can charge to the account repeatedly up to a maximum limit.​

• True
• False

Paying for a purchase with a credit card, rather than cash or a debit card, gives the consumer more leverage in the event of a dispute.

• True
• False

Loan refinancing usually results in lower interest costs.​

• True
• False

Title loans generally have low interest rates because lenders hold the titles to borrowers' vehicles as collateral.

• True
• False

​Chapter 13 bankruptcy is also known as straight bankruptcy or liquidation bankruptcy because it involves forfeiture of an individual's assets in exchange for discharging the individual's debt.

• True
• False